Bowman and Brooke Logo

INSIGHTS

 
January 18, 2019

Supreme Court Unanimously Rejects “Wholly Groundless Exception” In Determining Arbitrability Issue

Related Topics
legal alert icon
On January 8, 2019, the U.S. Supreme Court issued a unanimous decision in Henry Schein, Inc. v. Archer & White Sales, Inc. rejecting the notion that a court can determine the issue of arbitrability in cases where parties demonstrated a clear and unmistakable intent in their arbitration agreements to have issues of arbitrability determined by an arbitrator rather than by the court.
 
The Supreme Court’s unanimous rejection of the so-called Wholly Groundless Exception is important. The Wholly Groundless Exception was used by a number of circuit courts of appeal to retain jurisdiction over matters they unilaterally determined to be without merit, thereby depriving parties of their bargained-for right to have all issues—including issues concerning arbitrability—decided by arbitrators.
 
Justice Kavanaugh wrote the unanimous opinion—his first as a Supreme Court Justice. After a divisive and contentious confirmation hearing, it appears that the other justices are working cooperatively with Kavanaugh. The decision provides a thoughtful and reasoned approach based on: (1) the parties’ contract; (2) Supreme Court precedent; and (3) the express language of the Federal Arbitration Act.
 
To learn more about the U.S. Supreme Court's recent decision in Henry Schein, Inc. v. Archer & White Sales, Inc., please click here to read a special White Paper discussing the decision in more depth.
 

Related: